Rok Andic has a look at how to get correct twist rotation from a single bone.

Twisting is an integral part of a character rig. While most joints operate in one direction, there are a few that will also require a twist rotation. Most commonly, the forearm. Check out this tutorial from freelance 3d artist based in Kamnik, Slovenia Rok Andic. The video describes a method to extract correct twist rotation from a single bone using Houdini.

Andic covers how to create the setup for the upper arm, lower arm and wrist bones and then share a workflow for how to create the twist rotation. Also covered are the constraints that complete the arm rig setup that will include the twist rotations.